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Mitt Romney's inconvenient truth--that we all should be paying attention to

By Bryan Cones|Print |Share

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Democratic strategists are going to have a field day with Mitt Romney's astonishing gaffe recorded at a Boca Raton fundraiser about the 47 percent of Americans who pay no income tax[1] and think, in Romney's words, they are "entitled to health care, to food, to housing, to you name it." There is some truth to Romney's statistic--47 percent of U.S. households pay no income tax, though most of them still have payroll taxes deducted from their checks (federal withholding, Social Security, Medicare). Of the 18 or so percent who don't pay payroll taxes--and since Romney doesn't draw a salary right now, he doesn't--most are elderly or making less than $20,000 a year.

Get it? For the most part the people Romney is talking about can't make enough money to clear the low threshhold in taxable income that would require them to pay income tax. That's because their wages are too low, and so the government returns a portion (some, not all) of their payroll taxes in the form of the Earned Income Tax Credit, which for Romney evidently makes them freeloaders.

But the real freeloaders are the Walmarts and other ginormous corporations who pay poverty wages to their workers, relying on the subsidy provided by the federal government in the form of the EITC to keep people out of extreme poverty. Note that no one--not the president, not candidate Romney--is suggesting that businesses be required to pay a living wage. Those are the same corporations who think they are entitled to massive property tax and other breaks to keep their operations here in the U.S. And most local governments, led by both parties, go right along with their sense of corporate entitlement, in effect allowing these companies to dump their labor costs on taxpayers.

How clever to blame poor people who think, along with Catholic social teaching, that they have a right to food, decent housing, and health care, so that no one pays attention to the massive government subsidies--local, state, federal--that let corporations get away with paying such low wages that every family must have at least two earners, who together still can't make ends meet.

If we are concerned about people paying their income taxes, there's an easy way to make sure we all have skin in the game: Require businesses to pay a living wage and stop freeloading off the government.